Festive fervour puts automobile retail sales in fast lane in October

New Delhi: Aided by robust festive season offtake, automobile retail sales in India witnessed a 48 per cent annual jump in October, the automotive dealers' body Federation of Automobile Dealers Associations said on Monday.

The total retail sales last month stood at 20,94,378 units, up 48 per cent from 14,18,726 registrations in October 2021. The registrations last month were even better by 8 per cent as against October 2019, a pre-COVID month.

The festive season this year turned out to be the best for the industry in the last four years.

Last month, all the vehicle segments like passenger and commercial vehicles, two-wheelers, tractors and three-wheelers performed better as compared to the year-ago period.

Passenger vehicle retails stood at 3,28,645 units last month, up 41 per cent from 2,33,822 units in October 2021. Similarly, two-wheeler registrations witnessed a 51 per cent jump last month at 15,71,165 units compared with 10,39,845 units in October 2021.

Commercial vehicle retail sales were up 25 per cent at 74,443 units last month, as against 59,363 units in the year-ago period. Three-wheeler and tractor retails were up 66 and 17 per cent respectively over October 2021.

"With most of the month under festive period, the sentiments were extremely positive across all categories of dealership. Even when compared to pre-covid month of 2019, overall retail sales for the first time closed in green," Federation of Automobile Dealers Associations (FADA) President Manish Raj Singhania said in a statement.

The extremely robust demand due to festivities last month brought cheer to the industry as customers in every segment came out in good numbers making it the best in the last four years, he added.

"As anticipated earlier, the PV segment saw the best year in a decade by outgrowing 2020 numbers by 2 per cent. When compared to pre-COVID festive season of 2019, overall retails were up by 6 per cent," Singhania said.

Commenting on the PV segment, he noted that sports utility vehicles continue to see extremely high demand.

The two-wheeler segment witnessed a growth of 6 per cent in retail sales last month, as compared with October 2019, a pre-COVID year, Singhania said.

"With both Navratri and Deepawali majorly falling in a single month, the month of October saw double footfall at dealerships," he noted.

Sentiments have also started to improve at the rural level but the same needs to sustain for at least next 3-4 months, he added.

In the 42-day festive period this year, total retail sales stood at 28,88,131 units, up 29 per cent from 22,42,139 units.

Passenger vehicle retails rose 34 per cent to 4,56,413 units, as against 3,39,780 units in the festive period last year.

Two-wheeler registrations rose to 21,55,311 units during the period under review, from 17,05,456 units last year, an increase of 26 per cent.

Similarly, three-wheeler, commercial vehicle and tractor sales increased by 68, 29 and 30 per cent respectively over the festive season last year, FADA said.

"With festivities ending, the immediate next month generally witnesses a certain amount of softness in sales. While farmers will start receiving their crop realisations, the overall sentiment continues to show some headwinds especially in the two wheeler rural segment," Singhania said.

The CV segment is anticipated to see continued demand due to rising infra projects and government spending, he added.

While the PV segment continues to outperform, demand in the entry-level segment continues to show some softness, Singhania noted.

"Most of the OEMs will now start migrating towards manufacturing vehicles conforming to next emission levels. This will definitely see a steep price increase across all categories of vehicles as and when they hit the market," he added.

FADA hence remains cautious as the auto industry approaches the year end period, he stated.